Rent, Interest & Profit

The Individualists opposed "usury" — manifested
in rent (on real property), interest (on money), and profit (in exchange) — as
tantamount to theft, the product of coercive privileges granted to capital by
the State. The Individualists argued that capital was able to command tribute
in the form of rent, interest, and profit because it was allowed to monopolize
wealth by the power of the State. Limits on genuine competition constricted the
natural opportunities for ordinary, productive people to such a degree that
they had no choice but to bargain and exchange with the owners of wealth on desperately
unequal terms. With the deck thus stacked for those who could manipulate the
machinery of State authority, the rich could effectively steal from working
people much of the value they had created in the economy; the unequal exchanges
between the owning classes and the working classes were indeed theft —
precisely to the extent that they were the result, not of free and open
competition, but of violent and arbitrary offenses against liberty.
Nevertheless, rather than proposing to ban or outlaw usury in all its forms, to
realize the economic ideal through authority (the very means
they opposed), the Individuals contended that equal exchange on the Cost
Principle would be the natural and ineluctable result of the law of equal
liberty and the sovereignty of the individual. They therefore inveighed against
the State Socialists, a group beguiled by the notion that the State, always the
protector of the ruling class, could be harnessed to create equitable economic
conditions within society. Here are the Individualist in their own words...

"Under this law all individuals have a right to
do anything and everything which they may choose voluntarily to do at their own
cost. Make this law universal, and keep the hands of Church, State, and every
other arbitrary, coercive despot away from it, and perfect Liberty will result
as naturally as all other things finds their level in nature. The practice of
usury is a sacred and inviolable prerogative of individuals who choose to
contract for its payment. If the cost, in practice, ultimately falls upon the
innocent and toiling masses, it is because this prerogative is forbidden to
these proscribed slaves by the machine known as the State. . . . [I]f the power
to take usury were extended to all men, usury would devour itself, in its very
nature. But this is exactly one of the chief purposes of the State,—namely, to
cut off a great part of the race from the practice of usury, and confine it to
the few, so that they may live in luxury on the toil of their
artificially-created slaves." - Benjamin R. Tucker

“We have seen that the whole device of income without work
is fraudulent and without the least justification in ethics or economics; that
it vitiates all exchanges with which it is connected, since what is produced by
labor cannot be brought into any exchangeable relation whatever with that which
it requires no labor to produce; that all exchanges which involve pure profit,
rent, and interest, to the extent that they involve them are no economic
exchanges whatever, but the fraudulent or hazardous obtaining of something for nothing.”
– Joshua King Ingalls

"Interest for the use of money, or increase without
service, is an unscientific savagism, widely prevalent, but which the light of
reason will dispel. Value is a perishable (as well as stealable) quality;
property decays, interest increases—the two drawing in opposite directions. If
you loan me value, and I defend it from decay and thieves, ought I not to be
paid for the service? The idea that interest is the loaner's share of the
profits is a denial of the right of property; for, since there can be no wealth
without service, he who gets profit without work is a thief." - Ezra
Heywood

"When it is seen that one form of exploitation,
rent, is due to the monopoly in land sustained by the State in the interest of
the landlord; that another form of exploitation, interest, is the result of
monopoly of credit, a monopoly which limits the demand of labor and deprives
capitalists and laborers of the opportunity of engaging in industrial and
commercial enterprises; that profits are the result of the monopoly of industry
and commerce, concentrated in fewer and fewer hands,—the conclusion is
inevitable that the abolition of all these monopolies rather than the abolition
of private enterprises, that the extension of freedom rather than the
suppression of the competitive system, is the remedy and the solution . . . ."
- Victor Yarros

"But when producers increase in numbers there arises
competition in offering articles in exchange to benefit by the decrease of
effort due to the division of labor. And presupposing enough producers of each
commodity to satisfy the respective demands for them, competition will tend to
make them exchange on a basis of labor time or effort necessary to overcome the
obstacles of production.

"For, should the demand for any article be more than
the supply of this article offered for exchange, the probability is that a rise
in the price or value will ensue. And presupposing a number of marginal
workers, that is, producers whose aptitude in producing different articles is
approximately equal, there will be an influx of capital and labor into the production
of the article which has increased in exchange value.

"So it may be said that, granting free
competition, that is, free and equal access to the means of production, to
the raw materials, and to an unrestricted market, the price of all article will
always tend to be measured by the effort necessary for their production. In
other words, labor as a factor in measuring value will become predominant.

"Should there be any restrictions, however, to these
phases necessary to free competition, the desire or utility factor will tend to
become more prominent as a factor in the exchange value of those things to
which artificial hindrances to production have been applied.

"From the Anarchist standpoint, these artificial
hindrances which are the cause of three main forms of usury—interest, profit,
and rent, are, in the order of their importance, monopoly in the control of the
circulating medium—money and credit, private property in land not based on
occupancy and use, patent rights and copyrights, and tariffs." - Laurance
Labadie

"Whatever contributes to production is entitled to
an equitable share in the distribution! Wrong! Whoever contributes to
production is alone so entitled. What has no rights that Who is bound to
respect. What is a thing. Who is a person. Things have no claims; they exist
only to be claimed. The possession of a right cannot be predicated of dead
material, but only of a living person. In the production of a loaf of bread,
the plough performs an important service, and equitably comes in for a share of
the loaf. Absurd! A plough cannot own bread, and, if it could, would be unable
to eat it. A plough is a What, one of those things above mentioned, to which no
rights are attributable." - Benjamin R. Tucker

"Since labor is the source of wealth, interest, or
increase without work, invades the fundamental right to property. Since all
equitable exchange is simply exchange of services, interest being a monopoly
price of money, should be an out-law in economical science." - Ezra
Heywood

"[Henry] George gets into difficulty in discussing
this question of the increase of capital simply because he continually loses
sight of the fact that competition lowers prices to the cost of production and
thereby distributes this so-called product of capital among the whole people.
He does not see that capital in the hands of labor is but the utilization of a
natural force or opportunity, just as land is in the hands of labor, and that
it is as proper in the one case as in the other that the benefits of such
utilization of natural forces should be enjoyed by the whole body of
consumers." - Benjamin R. Tucker

"Does liberty exist where rent, interest, and profit
hold the employee in economic subjection to the legalized possessor of the
means of life? To plead for individual liberty under the present social
conditions, to refuse to abate one jot of the control that legalized capital
has over individual labor, and to assert that the demand for restrictive or
class legislation comes only from the voluntary associations of workmen is not
alone the height of impudence, but a barefaced jugglery of words. . . . Capital
itself is man's best friend, the true saviour that opens the march of progress
and that has transformed society into peaceable pursuits. But under the
blasting hand of legislation, where privilege sits entrenched and mocks at
penury and want, its mission is thwarted." - Dyer D. Lum

"[T]he poverty of working people, caused not by their lack of skill or thrift, is a condition imposed on creative Service by the stealthy greed of capitalists who, monopolizing land, currency, and other means of production and exchange, make advantage-taking not Service, the basis of business, force unnatural increase to favor a few cunning players of the game and render the progressive inequality of wealth inevitable. Property in land, which begets rent, and credit monopoly, which makes usury possible, are the chief means by which Capital, holding labor in lucrative vassalage, hinders and spoliates Enterprise to enrich a privileged few." - Ezra Heywood

"If the cost principle of value cannot be realized
otherwise than by compulsion, then it had better not be realized. For my part,
I do not believe that it is possible or highly important to realize it
absolutely and completely. But it is both possible and highly important to
effect its approximate realization. So much can be effected without
compulsion,—in fact, can only be effected by at least partial abolition of
compulsion,—and so much will be sufficient. By far the larger part of the
violations of the cost principle—probably nine-tenths—result from artificial,
law-made inequalities; only a small portion arise from natural inequalities.
Abolish the artificial monopolies of money and land, and interest, profit, and
the rent of buildings will almost entirely disappear . . . ." - Benjamin
R. Tucker

"Economists treat rent, interest, and profit as if
solely embraced within the principles of exchange. Moral, and, generally,
religious reformers have classed them with the tribute-gathering of despotic
power. Now from neither of those suppositions alone can any satisfactory
conclusion be deduced, because the terms embrace wholly contradictory and
incompatible things under the same name." - Joshua K. Ingalls

"The right to do a thing and the abstract right of a
thing involve two essentially different principles. For instance, we have
defended the right of individuals to make contracts stipulating the payment of
usury, and should strike at the very essence of Liberty if we did not; but this
defence of individual right by no means carries with it the defence of usury as
an equitable transaction per se. . . . The only way even to
approximately solve the right and wrong of human acts is to leave every
individual free to make such contracts with his fellows as to them seem good.
The fact of how far given transactions are executed at the cost of others will
soon be made evident in every case by the protest of those on whom the cost
unjustly falls. If every individual is left free to make contracts and ever
free to enter an effectual protest against transactions where the cost falls
upon his shoulders without his consent, the consequent adjustments will reach
the nearest possible approach to absolutely justice. . . . Liberty, therefore,
must defend the right of individuals to make contracts involving usury, rum,
marriage, prostitution, and many other things which it believes to be wrong in
principle and opposed to human well-being. The right to do wrong involves the
essence of all rights. Perfect liberty to contract for what is wrong is the
shortest and surest way to abolish that wrong, provided that the State can be made
to step down and out and leave the wrong to its merits in a fair fight with no
favors." - Benjamin R. Tucker

"Some oppose usury, or what they term high rates of
interest, but defend low rates; yet the difference is in degree, not in kind;
for the labor and risk involved being paid, all beyond that is extortion. As
well argue that chattel slavery was wrong in ten states, but right and
constitutional in two or three. Hence, as an invasion of abstract justice,
interest must be adjudged crime in the court of conscience; and the right to
meddle with it, carries with it the right to abolish it altogether." -
Ezra Heywood

"To say that the sovereignty of the individual is
conditioned by Liberty is simply another way of saying that it
is conditioned by itself. To condition it by the cost principle is equivalent
to instituting the cost principle by authority,—an attempted fusion of
Anarchism with State Socialism . . . ." - Benjamin R. Tucker

"By making all unused and unoccupied land free for
anybody to use, monopoly rent would disappear, and monopoly price, the
speculative price at which vacant land is held, which is equivalent to rent,
which is, in fact, monopoly rent capitalized, could no longer exist. . . .

"The tendency of economic rent [in contrast to monopoly
rent] is always to reduce itself to a minimum; because the inherent advantages
of land are variable. That is, a disadvantage for one sort of use is often an
advantage for another." - John Beverley Robinson

"The free-trade idea, logically applied, will abolish usury; and with usury will disappear the chief bone of contention between labor and capital. But, just at this point, free-traders go over to the enemy; and many writers on political economy, in flat contradiction of the essential principles of that science, have made elaborate arguments to prove self-government in finance, impossible! What shall we think of men who, having dethroned kings, demolished popes, destroyed slave oligarchies and assailed tariff monopoly, advise submission to the most oppressive and dishonest of despotisms, Usury?" - Ezra Heywood

"It is overlooked that a large proportion of the
exchanges which take place in the world are in nowise affected by the rule
of the market, that each one shall get the most he can for what he parts
with, while giving the least possible for what he requires. Indeed but a small
proportion of the transfers in social life are subject to competitive offers at
all; and besides, in those transfers which are so subject, one party must yield
to the other in each transaction all the profit which is
realized by the other; otherwise the exchange would be reciprocal, no matter
what the nominal profit, and the benefit being mutual, no inequality could
result." – Joshua K. Ingalls

"Who pretends to generalize it [i.e., the Cost
Principle]? Certainly no Anarchist. The pretension is that it will generalize
itself as soon as monopoly is struck down. This generalization, far from being
conventional, depends upon the abolition of conventions. Instead of being
narrowly limited in practice, the labor measure of exchange will become,
through Liberty, an almost universal fact." - Benjamin R. Tucker

"But what, according to your opinion, is to
determine the value of labor?

"Its utility in free competition, which will
determine its value of itself. All fixing of value by authority is unjust and
nonsensical." - John Henry Mackay

"How to create want, how supply can 'corner' demand,
by legislative or commercial devices, so as to 'make' money without earning it
by personal service, is the impelling force of much that is called 'business,'
but which is, really, repressive advantage-taking for speculative increase. The
fact of labor's artificial subjection and impoverishment by capital is so
apparent to unbiased observers, that argument to show it would be superfluous,
did not recognized exponents of thought gravely assert that, whatever there may
be in other and older countries, there is no tyranny of capital in America;
that laborers in our cities and manufacturing districts who would not be
'crowded out of existence by the mere fact of their numbers' need not, and
should not, contest the case with capitalists, but should quietly withdraw and
'Go West.' It is said that capital exercises no real tyranny, because labor is
free to accept or reject the terms offered. But bound by subtler chains than of
old, labor is enslaved and defrauded by conditions and devices which capital
creates and administers. Through the morally indefensible claim to profits;
through the control of land, water-courses, steam, railways, currencies, and
governments, — capital, by sheer compulsive power, is master of the situation;
can bide its time, and starve labor into submission. What whips, revolvers, and
bloodhounds were to chattel bondage, usurped control of raw materials and the
means of exchange, whereby want and destitution are produced to order, is to
the profit system." - Ezra Heywood

"I find everywhere, among my socialist friends, men who have for so long insisted that the only way to remedy unmerited poverty is to nationalize the means of production, that they now advocate nationalization for its own sake, and condemn competition, 'private profit', and individual ownership, as things pernicious in themselves. Among these men has grown up an entire philosophy of history, setting up nationalization of industry as the consummation of a tendency discovered by them in social progress of all times." - Henry Meulen